Nelson v. Nelson

• Decision Date: 21 December 1960
• Parties: , 89 A.L.R.2d 1 Helen G. NELSON, Respondent, v. Jere J. NELSON, Appellant.
• Court: Oregon Supreme Court

Page 536

357 P.2d 536

225 Or. 257, 89 A.L.R.2d 1

Helen G. NELSON, Respondent, v. Jere J. NELSON, Appellant.

Supreme Court of Oregon, Department 2.

Argued and Submitted Nov. 10, 1960.

Decided Dec. 21, 1960.

William E. Hurley, Portland, argued the cause for appellant. On the brief were Bernard, Bernard, Edwards & Hurley, Portland.

George L. Hibbard, Oregon City, argued the cause for respondent. With him on the brief were Hibbard, Jacobs, Caldwell & Kincart, Oregon City.

Before McALLISTER, C. J., and SLOAN, O'CONNELL, GOODWIN and HOWELL, JJ.

O'CONNELL, Justice.

The defendant husband appeals from an order denying his motion for a modification of a divorce decree entered on January 27, 1958. Defendant sought a reduction in the amount he was obligated to pay under the decree for the support of his four children, the custody of which had been awarded to plaintiff. The divorce decree provided that the defendant pay the sum of $500 per month for the support of his children. In addition, he was required to pay the sum of $20,000 at the rate of $300 per month to the plaintiff wife pursuant to a property settlement agreement.

Defendant is a physician. He began the general practice of medicine in Oregon City in 1951. In 1952 he formed a partnership with another doctor. The partnership was profitable. In 1957, the year immediately preceding the divorce, defendant's monthly income averaged approximately $2,000. For various reasons defendant was not happy with his practice in Oregon City. He was offered a position in a clinic in San Diego at a salary of $1,000 a month, which he decided to accept because, among other reasons, it afforded him an opportunity to practice in his specialty, geriatrics and internal medicine. Defendant's partner agreed to purchase defendant's share of the Oregon City practice for a price of $17,500. Defendant testified that at the time he decided to accept the California position he was then of the opinion that the value of his interest in the Oregon City partnership was $30,000. However, subsequent review of the accounts receivable revealed that many of them were uncollectable and, therefore, the $30,000 estimate was reduced to $17,500 as the selling price. Defendant recites this miscalculation of the value of his interest in the partnership as evidence that when he decided to leave his Oregon City practice he had the prospect of having sufficient income to pay the total amount required under the divorce decree, and that, therefore, he acted in good faith.

Both parties have remarried. Defendant's present wife has a child by a former marriage whom the defendant has adopted. At the time of the hearing in this action for modification defendant's wife was expecting a child by defendant.

In denying defendant's motion for a modification of the award the trial court rendered a memorandum opinion which reads in part as follows:

'The defendant urges that the sale of the medical practice did not bring the desired amount; that this fact along with present reduced income and other changed circumstances should entitle him to relief from this Court.

'However, it is the opinion of the Court that defendant's changed circumstances were brought on by his own volition and with knowledge that his income would reduce on the one hand and expenses increase on the other.

'The children are entitled to be raised on a standard commensurate with the status of which they are accustomed.

'This Court has been and will be cautious in modifying a decree under circumstances presented herein.'

It is evident that the trial judge was of the opinion that defendant's conduct in voluntarily accepting another position with knowledge that his income would be reduced could not be considered as a ground for modifying the decree. The sole question presented on appeal is the validity of the court's assumption that such a voluntary change in position precludes a modification of the support decree.

Where the defendant husband, acting in bad faith, voluntarily worsens his financial position the authorities leave no doubt that he cannot obtain a modification of a decree under which he is required to pay alimony or support money. Commonwealth ex rel. Saul v. Saul, 1954, 175 Pa. Super. 540, 107 A.2d 182, 184; Caldwell v. Caldwell, 1940, 259 App.Div. 845, 19 N.Y.S.2d 392, 393; Crosby v. Crosby, 1944, 182 Va. 461, 29 S.E.2d 241, 243. However, in the case at bar there is no evidence that defendant acted in bad faith in selling his Oregon City practice and accepting employment in California, and there is nothing in the record to show that the trial court's refusal to grant defendant's motion for modification was based upon defendant's bad faith. Defendant testified that at the time he decided to make the change he estimated his share of the partnership at $30,000 which, together with the prospective salary of $1,000 a month would have enabled him to meet his obligations. Accepting this as true, it would indicate that defendant was not acting in bad faith when he decided to make the change. It is possible however, that the trial court did not accept defendant's version of the matter and concluded that defendant had knowledge that his share of the practice was not worth more than the $17,500 which he received for it. Assuming that the trial court reached this latter conclusion, it would not follow that defendant acted in bad faith in making the change.

One may in good faith make a change in occupation, fully aware that the change will reduce his ability to meet his financial obligations to his children. To find bad faith it would be necessary to show that defendant acted with a purpose of jeopardizing the interests of his children. The evidence firmly establishes that in deciding to accept the position in California defendant was not prompted by any such motive, but rather by the desire to enter into a type of medical practice which he preferred.

We are brought then to the question presented on this appeal, i. e., whether a defendant who, in good faith, elects to embark on a new enterprise at a reduced income is entitled to have the trial court consider such a change in circumstances as a basis for modifying a decree for support money.

Plaintiff relies upon the cases holding that the husband's remarriage, and the consequent reduction in his ability to pay the amount required by the decree is not a basis for modification of the decree. The case of Norris v. Norris, 1947, 182 Or. 101, 186 P.2d 67, 70 is referred to for pronouncement of this principle. In that case the court, quoting from 2 Nelson, Divorce and Annulment (2nd Ed. 1945), § 17.12, p. 439, stated that defendant must 'make a showing of a change in circumstances other than merely by reason of his volitional act in remarrying.' See also, Mark v. Mark, 1957, 248 Minn. 446, 80 N.W.2d 621, 624; Bryant v. Bryant, N.D.1960, 102 N.W.2d 800, 807; Mallow v. Mallow, 1948, 84 Ohio App. 89, 84 N.E.2d 236. Some courts have been more sympathetic to the husband, regarding his remarriage as a circumstance to be considered in an application for reducing the amount required to be paid as alimony or child support under a divorce decree. Gusewelle v. Gusewelle, 1958, 229 Ark. 191, 313 S.W.2d 838, 839; Allen v. Allen, 1050, 326 Mass. 214, 93 N.E.2d 554, 555; McIlwain v. McIlwain, 1939, 135 Neb. 705, 283 N.W. 845, 848; Herrett v. Herrett, 1914, 80 Wash. 474, 141 P. 1158, 1160.

But these cases refusing to recognize the husband's remarriage as a basis for modifying the decree are not applicable to the case before us. Here the defendant has remarried but he does not rely upon that change of circumstance in requesting a modification of the decree; he asks the court to adjust his obligation under the decree to his reduced earning power brought about by his change in...